4:1 bonus shares & Rs 2,326 crore order book: This multibagger engineering company bags new orders worth Rs 1033,78,00,000 from TANGEDCO

The stock gave multibagger returns of 115 per cent in 1 year and a whopping 770 per cent in 5 years.

Today, the Indian stock market was in red, with the BSE Sensex and NSE Nifty indices plunging 0.05 per cent and 0.15 per cent respectively. Along with the market in the red, one multibagger penny stock hit a 5 per cent lower circuit of Rs 19.67 per share from its previous closing of Rs 20.70 per share. The stock’s 52-week high is Rs 34.08 and its 52-week low is Rs 7.20.

The stock name is SALASAR TECHNO ENGINEERING LTD (STEL).

Salasar Techno Engineering has secured a significant contract win from Tamil Nadu Generation and Distribution Corporation Limited (TANGEDCO) valued at Rs 10,33,78,00,000. This project focuses on developing and improving the state's electricity distribution infrastructure. Salasar will deliver comprehensive services in the Coimbatore district and undertake development work across various districts including Tiruvallur, Kanchipuram, Chengalpattu, Karur, Krishnagiri, Pallikonda, Vellore and Villupuram. This initiative prioritizes reducing energy losses and enhancing operational efficiency within the distribution network. This achievement highlights Salasar's commitment to infrastructure advancement and promoting sustainable development in Tamil Nadu.

STEL, established in 2006, acts as a single source for customized steel infrastructure solutions in India. They offer comprehensive services encompassing engineering, design, fabrication, galvanisation, and installation. Their product range includes various towers (telecom, power transmission, lighting, etc.), substations, solar structures, railway electrification components, bridges, and custom steel structures. Additionally, STEL acts as an EPC contractor, undertaking complete project management for rural electrification, power lines, and solar plants. As a leading manufacturer with a substantial production capacity, they've supplied numerous structures across India and internationally, solidifying their position as a prominent player in infrastructure development.

The company has an order book of Rs 2,326 crore as of December 31, 2023, out of which Rs 1,879 crore are domestic EPC orders, Rs 221 are international EPC orders, orders under heavy steel structure division are worth Rs 110.7 crore, Monopoles orders are worth Rs 72.1 crore and exports orders (telecom towers and poles) are worth Rs 43.2 crore.  

Additionally, the company emerges as the lowest bidder (L1) from Madhya Pradesh Power Transmission Company Limited (MPPTCL) for the construction of 132kV and 220kV transmission lines and associated feeder bays on a total turnkey basis in Eastern Madhya Pradesh. The order is a joint venture partnership wherein RVNL's shares in the project is 51 per cent and Salasar Techno Engineering Ltd.’s share is 49 per cent. The order is worth Rs 173,99,04,310 or Rs 173.99 crore (including GST) and will be completed within 18 months. 

According to Quarterly Results (Q3FY24), the net sales increased by 26.32 per cent to Rs 304.35 crore and net profit increased by 56.75 per cent to Rs 167.10 crore compared to Q3FY23 while in nine-month results (9MFY24), the net sales increased by 18.43 per cent to Rs 841.10 crore and net profit increased by 40.89 per cent to Rs 35.96 crore compared to 9MFY23. As of December 2023, promoters own 63.07 per cent, FIIs own 8.85 per cent and the public owns 28.08 per cent.

The company issued bonus shares in a 4:1 ratio to its shareholders on February 1, 2024 (ex-date). This means that for every one share a shareholder held, they received four additional shares. Additionally, the company distributed a dividend of Rs 0.10 per share on September 15, 2023 (ex-date). The stock gave multibagger returns of 115 per cent in 1 year and a whopping 770 per cent in 5 years. Investors should keep an eye on this Small-Cap stock.

Disclaimer: The article is for informational purposes only and not investment advice.